A mounting crisis at one of Portugal’s biggest banks and signs of a deepening economic slowdown in Europe have sent tremors through financial markets, triggering a sharp fall on European bourses and a flight to safety across the world.   Portugal’s regulator suspended trading of Banco Espirito Santo after its share price crashed 17pc in Lisbon, reviving worries about the underlying health of Europe’s banks. The STOXX index of European lenders fell to its lowest this year following a bank run in Bulgaria and a profits shock from Austria's Erste Bank. The index is down 11pc since early June.   Yields on Portugal’s 10-year debt surged 20 basis points on Thursday to 3.95pc, with contagion spreading to Greek, Spanish and Italian debt.  Before I board for Budapest! I remarked yesterday about the closing FDI window through worries about €Z stability - highlighted by the Holy Ghost in Portugal but already with knock-ons in Greece, Spain, Slovenia and Bulgaria-Romania.  I mentioned the Indian budget/plan that would normally, because of its cautiousness, propelled some FDI into a stable €Z. Money the €Z desperately needs to catalyse growth.  Well another small nail in the €Z FDI coffin today http://www.thetimes.co.uk/tto/... - as the BRICS set up their own development bank as a counter to Laggard's arrogant stupidity in setting up an €MF and an IMF. Now the BRIC money (reserves not borrowings) will be going to their bank not into the last resort coffers of the €MF.
No FDI, a totally impotent ECB, like water on stone... Zero Hedge is always an interesting read at times like these. Only if they crash, and get another central bank asset bailout, like in 2008. The amount of imaginary 'money' the central banks can create is infinite. At least, until it becomes worthless during hyperinflation. I think that day is closer than most people realize. It won't be caused by banks, though. It will be a government response to the effects of peak oil. As the cost to go after what oil remains gets too high, governments will start pumping out money to try and prop up the economy, as it begins to shrink from not enough affordable oil being available. They will create euros & dollars by the trillions, and shove them into the economy to try to boost economic activity. It will work for a while. Then the inflation will hit, and accelerate very quickly. Anything they do to try and rein in the inflation, will cause an instant global financial collapse. The numbers in Pritchard's last oil article show how close we are to peak oil. He is dreaming that all that energy can be replaced in transportation, with any other energy source, in time to prevent the apocalypse. It is 40 years too late to get that done in the time we have left. Transportation is the weak link in the global economic system that will prevent Pritchard's energy fantasy from being realized. Oil products move over 90% of everything that moves. Today there's a fascinating article about how state-controlled Chinese banks have been conniving with Chinese oligarchs to park their ill-gotten gains in foreign countries, notably America, in contravention of the tight capital controls in that country,
The market for colossally expensive US developments has been booming thanks to this tsunami of illegal money.
The purpose of this official winking-at illegality has been to minimize inflationary pressure in China.
Now that the cat's out of the bag, we can expect the Chinese Government to cover their involvement by actually enforcing the capital control regulations.
The result will be a steep rise in Chinese inflation and a collapse in the market for premium US properties.
The rise in Chinese inflation will require a raising of interest rates and a reining-in of economic activity, with wider consequences for the world.  We are living through times of extreme financial froth and danger...It very much looks like another Euro crisis is in the offing.How much longer can they
keep this decrepit creaky edifice known as the EMU standing. Another cut in the  slow death of a 1000 cuts.

The German government has recently signaled willingness to compromise on the issue of which body would be responsible for deciding if a bank needs to be liquidated. Initially, a newly created committee with representatives of national authorities would assume this responsibility, but the formal decision could then be left to an EU body like the European Commission. In disputed cases, the European Council, the powerful body that includes the leaders of the 28 member states, would be brought in to arbitrate.

Berlin has also agreed in principle to calls for a liquidation fund for failing financial institutions that would have a capacity of €55 billion ($76 billion) within 10 years. But the EU member states are supposed to agree among themselves on how these funds can actually be used, with greater voting weight being given to more populous countries. This idea hasn't gone over well with some governments, because they fear that Berlin, working together with a few small countries, would be able to block decisions. In addition, the money in the fund would not be available for use until it is transformed into an official EU instrument in 10 years' time.

Under the "liability cascade" plan being promoted by Schäuble, however, bank shareholders will be required to pay part of the costs for liquidating a bank starting in January 2016. Owners and creditors would first be required to cover any liquidation costs before any taxpayer money could be brought in. Berlin has had success so far in negotiations on this point. The German government had wanted to introduce this rule as early as 2015. But other member states like Italy pleaded for it to start at the earliest in 2018. They fear the move to start in 2015 might frighten investors.

And there's one additional play to safety: Germany continues to oppose using the European Stability Mechanism, the permanent euro-zone rescue fund, as a backstop for fledgling banks. Other countries have suggested employing the fund's billions of euros as part of a future banking union resolution mechanism.

Not looking good for France-business optimism is down again:"...National statistics institute INSEE said on Tuesday [23rd. October] its indicator for morale in the manufacturing sector slumped to 85 in October, worse than the lowest estimate in a Reuters survey of 23 economists. The poll had forecast business morale would be unchanged from last month at 90. The indicator was dragged lower by a sharp deterioration in survey responses relating to total orders and demand, which slumped to -39 from -28 in September - dragged lower by the deepening recessions in southern euro zone nations such as Italy and Spain, which rank amongst France's main export markets..."That's a big drop by any stretch of imagination...As a member of the public I would like to go on record as saying that I am not deeply unhappy with the the EU. In fact, I am absolutely bloody furious ! A bigger bunch of narcissist, egotiscal lunatics I have never seen in my life. Their battle cry of "The project is more important than people" is never far from their lips. Mr Hague do everyone a favour and tell "call me Dave" to get going on planning a referendumon th EU now, the UK voting public would thank you for it. As far as I'm aware the ESM is outside any laws and jurisdictions, not just those of Europe.

If this lot doesn't constiture being above the law, I don't know what does: "...In the interest of the ESM, the Chairperson of the Board of Governors, Governors, alternate Governors, Directors, alternate Directors, as well as the Managing Director and other staff members shall be immune from legal proceedings with respect to acts performed by them in their official capacity and shall enjoy inviolability in respect of their official papers and documents.

The ESM, it's property, funding and assets, wherever located and by whomsoever held, shall enjoy immunity from every form of judicial process except to the extent that the ESM expressly waives its immunity for the purpose of any proceedings or by the terms of any contract, including the documentation of the funding instruments.

The property, funding and assets of the ESM shall, wherever located and by whomsoever held, be immune from search, requisition, confiscation, expropriation or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action.

The archives of the ESM and all documents belonging to the ESM or held by it, shall be inviolable. The premises of the ESM shall be inviolable.  The official communications of the ESM shall be accorded by each ESM Member and by each state which has recognised the legal status and the privileges and immunities of the ESM, the same treatment as it accords to the official communications of an ESM Member.  To the extent necessary to carry out the activities provided for in this Treaty, all property, funding and assets of the ESM shall be free from restrictions, regulations, controls and moratoria of any nature.

The ESM shall be exempted from any requirement to be authorised or licensed as a credit institution, investment services provider or other authorised licensed or regulated entity under the laws of each ESM Member..." And it's officers, staff, and associates, past and present, are also bound to secrecy: "...The Members or former Members of the Board of Governors and of the Board of Directors and any other persons who work or have worked for or in connection with the ESM shall not disclose information that is subject to professional secrecy. They shall be required, even after their duties have ceased, not to disclose information of the kind covered by the obligation of professional secrecy..." I know that all the politicians are fully aware of these ilegalities , but it's worth impressing it once more, because I can't believe how any nation or state would sign up to this!

Enormous growth with cheap money, that's United Europe

That is what we experienced in the last decades of the EU. Regard Spain, it changed, grew and modernised, in rural regions partially medieval,her life with an unmatched velocity never experienced before in history. - And ended in the financial crisis. That was mainly the fault of the socialists, with the coward Zapatero, now fleeing before the voters, and by socialists inbred attitude to waste the money, that others earned. And this horror experience shall now be revived in France with a President to elect who already declared that he would disregard the rules for austerity- and preferably waste German money.
By the way:I just returned from the "total emergency“ in Spain’s most suffering region Catalonia, nearly bankrupt. The restaurants were filled with Spanish families. Enjoying excellent food with pescados, mariscos and bogavantes (lobster) together with cava and one of the favourite cars seems to be the Porsche Cayenne... With the speed at which the level of quoted debt is increasing and far greater than any rate of inflation surely there must be questions on how big the black hole in the finances actually is. If you told me it was a 100 billion today then all of a sudden it lurched to 300 billion any sane person would say "WTF". ... SO SOMEBODY HAS BEEN LYING OR HIDING THE TRUE SCALE OF THE PROBLEM! At that point you can't fix it the size of the problem is not yet determined so honestly now "how big is the problem"??? You will not get a straight answer on this because they would be called out on it tomorrow when it has doubled yet again!....Germany’s ECB board member, said today: “The risk premia of sovereign bonds now reflect not just the insolvency risk of some countries but an exchange rate risk, which should not theoretically exist in a currency union. The markets are pricing in a break-up of the eurozone. Such systemic doubts are not acceptable".
Ahhh, "theoretically"... Well, theories are often very, very wrong indeed. Or were Greece, Ireland, Portugal, now Spain and next Italy all supposed to be declared insolvent as part of the euro "master plan", eh? ...Want some more data for your "theory"?....there, you see..."The Catastrophic State of Italy's Labor Market - September 4, 2012 - Spiegel. Italy's economy remains in freefall. The country is shedding jobs, production rates are abysmal and the infrastructure is appalling. Banca d'Italia, now forecasts a 2 percent drop in GDP this year"

Two of the leading Petrom top managers, who were in the company's management team ever since the privatisation of the oil and gas producer in 2004, have this year left to carry out the reorganisation of OMV's latest acquisition: Petrol Ofisi."I won't be talking about Petrom today because it is already going in the right direction, of integration. Let's talk about Turkey." This was one of the opening messages conveyed by Wolfgang Ruttenstorfer, CEO of OMV in London, at the latest media summit organised by the Austrian oil group, Petrom's majority shareholder.
In mid-October, OMV finalised the acquisition of Turkey's biggest petrol station chain, Petrol Ofisi, for which it paid one billion euros, securing a significant share of a market credited with the biggest chances of growth in the next period.Reinhard Pichler, 49, former CFO of Petrom, left his position last week, being replaced by Daniel Turnheim, a member of the OMV group since back in 2002. Pichler is not leaving the group, however, but will go to Turkey, where he will fill the same position he has occupied in Petrom since 2004.At the beginning of this year Tamas Mayer, who used to be in charge of Petrom's marketing operations, i.e. of the nearly 550 distribution stations, left the position to become Vice Chairman of the Board of Directors of Petrol Ofisi. According to some sources, Mayer will be running marketing operations within Petrol Ofisi, as well.Agerpres, Mediafax, Romanian Vancouver Sun,Global News, Financial Times,Tribune, ,Wall Street Journal,The Washington Times,Athens News,The New York Times,USA Today,Le Monde

IMF to relax deficit targets for the co-funding of more EU projects

The IMF should relax budgetary gap targets for Romania so that more EU projects could be co-funded, states Andreas Treichl, a CEO with Erste Group, which controls BCR. "Romania is in a situation of conflicting objectives: its strong advantage are the funds available from the EU, but governmental funding is also necessary for these funds to be used. If money from the budget is allotted, deficit targets agreed on with the IMF are overshot and a conflict of 'interests' emerges. The IMF could relax the targets for the European funds to be used. This will be a very interesting exercise in the following months," Treichl stated.Banks have a direct interest in the success of such a move, considering many entrepreneurs and public authorities need loans to be able to co-fund the European funds they try to get. It remains to be seen whether the banking lobby in this respect will be as strong as in the case of modifications requested for Ordinance 50 regarding retail loan contracts.

Romania's international foreign currency reserves

Romania's international foreign currency reserves do not necessarily need to grow as they stand at a comfortable level, according to the governor of Romania's Central Bank (BNR), Mugur Isarescu.
He mentioned we have to give up the idea that it is a good thing if the international reserve is growing, NewsIn states.
As to the gold reserves of the neighbor countries, he said the central lender of Bulgaria has a reserve of 39.8 tons, that from Latvia 7.8 tons, that from Lithuania 5.9 tons, that from Poland 103 tons and that from Slovakia 31.7 tons. Romania's gold reserve stands at 103.7 tons.
The governor also talked about the gain from administering the international reserves, which dropped dramatically from 2008 and 2009 and even more in 2010.
The price of gold rose 2.5 times in the past five years.
Romania's foreign currency reserves lowered by 1.13 percent in June from the previous month, to 31.62 billion euros, according to a release issued by the central lender BNR.
Romania's international reserves – foreign currency and gold – eased 0.7 percent at the end of June to 34.99 billion euros, from 35.25 billion euros at the end of May.
The gold reserve maintained at 103.7 tons, but the evolution of international prices increased its value by 3.37 percent to 3.37 billion euros, from 3.26 billion euros in the previous month.